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Japan ViewPoint - Room to Grow II Rising Inbound Demand in Regional Cities to Drive New Hotel Development July 2018

Sapporo, Nagoya, Fukuoka - Total New Supply of 15,000 Rooms by 2020; Will Still Face Room Shortage
Hotel Demand Growth to Continue in Japan after Olympics

Hotel development boosted by growing inbound tourism in regional cities: Between 2017 and 2020, the supply of new hotel rooms in Sapporo, Nagoya, and Fukuoka is expected to amount to 18%, 31%, and 30% of existing stock, respectively.

2020 hotel market outlook for regional cities: CBRE estimates that, relative to demand, there will be a shortage of around 3,500 rooms in Sapporo, 2,100 rooms in Nagoya, and 1,400 rooms in Fukuoka.

New hotel type skewed in regional cities: At least 55% of new supply in regional cities are business hotels, higher than Japan’s three major hotel markets (Tokyo, Osaka, and Kyoto) where the average is 43%.

Post-Olympics hotel market: The increase in international tourism is a global trend and looks set to continue. Accordingly, hotel demand in Japan is also forecast to continue growing after the Tokyo Olympics/Paralympics.